TWENTY20 vision for Irish dairy calves

Bord Bia estimates that Ireland exported up to 200,000 calves in 2024 and while they are “fairly positive” about prospects for this calving season, it will be more difficult after this year.

Proposed changes to EU Transport legislation around journey times, feeding intervals, age at transport and space allowances will make exporting live calves less commercially attractive.

Furthermore the implementation of the “Veal Forward Plan” by Netherlands from next year will effectively close that market to Irish calves entirely.

Virtually all of the calves exported live originate in the Irish dairy herd and live calf exports have been a long established mechanism for realising their market value.

They typically entered veal production systems on the continent and the market for rearing dairy bred calves in Ireland for commercial beef production has been limited due to low margins.

If dairy calf exports are frustrated after this year, will this surplus of calves be a major problem or could it be an opportunity?

This week the Irish Farmers Journal spoke to Mick O’Dowd, head of Agriculture in Kepak in the first of a two-part series about an initiative they have going for dairy calves.

In the second part next week, Adam Woods will report on two farms that participate in the initiative and examine how commercially viable the project is for farmers involved.

The TWENTY20 (T20) beef club is a joint venture between Kepak and dairy processor Tirlán. It was launched in 2019 and pays a 30c bonus on eligible cattle, with 20c funded by Kepak and the other 10c funded by Tirlán.

The obvious starting point was how is the base price established on which the bonus is paid and O’Dowd pointed to the factory base quotes in the business of farming section in the Irish Farmers Journal and said that the base for the 30c bonus is the average of the base quotes across all the factories.

O’Dowd told the Irish Farmers Journal that the T20 beef club was open to all farmers but it is primarily targeted at farmers that have calves to rear or farmers that source calves that were reared in the club.

He explained that the rules are straightforward, and that all breeds are eligible with the exception of Jersey cattle.

To be eligible, calves must spend their entire life on a club member’s farm but that they can be traded twice, once from the farm where the calf was born to a farm where the calf is reared and if that farm doesn’t want to finish the calves, they can be sold on to a finishing farm in the club.

When asked about the level of interest in the club, O’Dowd said that currently there are about 2,500 members overall, and this breaks down into around 2,000 “that are supplying calves, supplying weanlings or supplying stores as well as finishing, and there are about 500 farmers just finishing these cattle through the programme.”

The first step for farmers thinking about joining the club is filling in an expression of interest form that contains data protection and authorisations and allows the farmer’s herd profile on ICBF.

The farm will then be visited by the T20 technical team at which point the famer is given a copy of the club’s purchasing policy including the rules and protocols.

If the farmer is happy with these, the farmer signs an agreement to supply a specific number of cattle over the year.

Cattle ear tags are registered on the Kepak T20 portal through electronic transfer from ICBF and the portal uses filters to check that the cattle meet the requirements of the club such as age, carcase weight, breed and movements.

Cattle that are eligible are given a T20 code and a Tirlán database captures all feed inputs to the animal.

The agreement includes data sharing consent which gives access to individual member data through AgNav and ICBF.

O’Dowd says that these requirements are straightforward and that “we want the farmer getting every bonus that is available to them”

To qualify for the club, cattle must be from farms that are in the Sustainable Beef and Lamb Assurance Scheme (SBLAS). It is open to all breeds apart from Jersey, but cattle must achieve at least an O- grade at slaughter since 2024 and carcases must weigh at least 260kg and be no more than 400kg.

The other essential criteria is that for cattle to qualify for the club bonus they can have no more than two movements between farms meaning that there can be up to three farms in total on which club cattle have resided. O’Dowd said that it is up to farmers themselves to decide on what bull they use though “the technical team are available to advise farmers and provide a recommended bull list”.

He also said that “The Commercial Beef Value (CBV) of the animal must be minimum three star (€-7 for Dairy Sire/Dairy Dam, €82 Beef Sire/Dairy Dam) at the point of birth/purchase.” He also said that the age limit of 28 months for steers and heifers and 19 months for young bulls hasn’t been a problem for members as “22.8months for heifers and 24 months for steers, average age of slaughter for cattle in the club is two months younger than the national average.”

All inputs fed to cattle in the club have to be sourced through Tirlán – GAIN animal nutrition or mercahnts that supply it.

While the T20 club cattle get the specific 30c/kg bonus, they also get any other bonuses for which they are eligible.

The most obvious is the QPS in-spec bonus (20c/kg for O= grades or better, 12c/kg for O- grades) as being quality assured is a requirement for entry to the club.

Aberdeen Angus and Hereford cattle in the T20 club qualify for a 20c/kg bonus, continental bred cattle get a 10c/kg bonus, and young bulls under 19 months get 25c/kg.

There is also a seasonality bonus for club members. Cattle presented for slaughter in May get an additional 10c/kg, and cattle presented in June and July get a 6c/kg seasonality bonus.

O’Dowd was keen to push the wider club benefits beyond the financial.

“Many farmers value the support service from getting help with sourcing the right type of calf to farm management practices to get the calves into specification for the bonus.”

The scheme has been in place since 2019 and O’Dowd told the Irish Farmers Journal that it has been “growing year on year” with over 50,000 cattle in total to date, last year it was 25,000.

“The ultimate target is to grow this to 50,000 cattle a year coming through the club”. He is looking for further growth in 2025, expecting 30,000 cattle to come through the club with all four Kepak sites now handling T20 club cattle.

When asked about how further potential there is for growth, Mick O’Dowd said “our ambition is to keep going and I would like to see us getting 50,000 cattle through the club with further growth.”

He also pointed out that very few farmers that join the club, leave it. Contracts are agreed on a year by year basis, and while a few may opt out for various reasons, many more have been joining than leaving.

O’Dowd explained the context of the T20 club by saying “we have history in Kepak with KK club.”

He also explained what was in it for Kepak, namely “improving dairy beef quality, and having an environmentally sustainable programme which demonstrates best practice to customers.

The attraction of a secure supply stream of cattle for a factory is obvious, and finding a way to make calves from the dairy herd work has the potential to solve a range of problems.

The future pressure on live exports combined with reduced supply of suckler bred beef cattle means that an opportunity is created for factories to develop an alternative source of cattle supply.

It was clear from the conversation with O’Dowd that the club is working for Kepak and Tirlán and that they are committed to continue their investment and expand it further.

However the ultimate success will depend on it not just working for the processors, it has to work for farmer members as well.

In part 2 next week, Adam Woods will report on how well the T20 club has been working for two farmers he is visiting this week.